Article Summary
Private renters in the UK are spending a significant portion of their wages on housing, with a third of them struggling to meet these costs and only 52% having savings, according to the latest English Housing Survey. Despite this, 2.6 million private renters expect to buy a home in the future, compared to under 1 million social tenants. On the other hand, owner occupiers are more likely to have savings, with 33% of them having savings of £50,000 or more.
What This Means for You
- Private renters are under pressure to meet their housing costs, with a significant portion of them struggling to afford their housing.
- Despite the challenges, private renters have a strong ambition to own a home, with many planning to buy in the future.
- Actionable advice: Consider budgeting and saving strategies to build up savings for a future home purchase.
- Owner occupiers are more likely to have savings, but renters, especially private renters, may need more support in building up their savings to achieve homeownership.
- Future outlook: The number of first-time buyers is increasing, indicating a strong pipeline of potential homeowners. However, affordability remains a challenge, with high house prices and the need for substantial deposits.
Original Post
Private renters remain under pressure as they spend a third of their wages on housing, a third of them struggle to meet these costs while only just over half have pulled together savings, the latest English Housing Survey shows.
Renters were the most likely to report difficulty affording their housing costs at 32%, against 19% of those with a mortgage.
However, owner occupiers were the most likely to have savings, at 79%, compared to 52% of tenants.
The most common savings amount for owner occupiers was £50,000 or more, with 33% of this group reporting savings of this amount.
By comparison, 32% of private renters most commonly had savings between £5,000 and £15,999.
However, the ambition of private renters to own a home was strong, with 2.6 million of them saying they expect to buy a home in the future, compared to under 1 million social tenants.
The study says: “Younger private and social renters were more likely to expect to buy than older renters, as well as those on higher incomes, those in lone male households and those with dependent children.”
Quilter financial planner Thomas Lambert adds the survey “demonstrates just how many private renters are caught in a state of flux.
“Private renters not only spend the highest proportion of their income on housing, coming in at just over a third, but they are also the most likely to struggle to afford their housing costs and just half have savings behind them.
“Those having difficulty paying rent rose considerably from 27% in 2019-2020 to 32% in 2023-24, which followed the sharp rise in rent costs seen during the cost-of-living crisis and mortgage market turmoil.”
However, the report highlighted a strong pipeline of first-time buyers.
The overall number of FTBs rose from 617,000 households in 2013-14, to 827,000 in 2019-20 and 975,000 in 2023-24.
The majority of FTBs were aged between 25 and 34 years old, 60%, while 21% were aged 35 to 44
Continue reading at First-time buyers take bigger slice of housing market pie
Key Terms
- Private Renters
- Owner Occupiers
- Housing Costs
- Savings
- First-Time Buyers
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